Are shorts about to provide fuel for Bitcoin appreciation?
Good Friday morning, traders. The end of the week is here and Bitcoin appears to be setting up for a large move. Many traders were shaken out overnight by the drop in price and remain even more skittish now. As I mentioned during last night's live stream, yesterday's daily candle printed an inside bar which most often precedes a strong movement. While that movement can be downward, inside bars are most often associated with a reversal of the previous trend. Indicators being at or near oversold as we've seen then lately, especially on the daily, as well as shorts going parabolic the past few days into overbought territory, provide support to the idea that we will see a strong move upward.
The daily chart shows price finding resistance at the descending dashed line as well as support at the S1. I am watching for a new higher high to be printed (price pushing above $8500 swing high) to confirm the potential LPS as noted on the chart. StochRSI remains strongly oversold and RSI is sitting at 36.5, just below its resistance at 41. A push through this resistance should see price pushing through the dashed line. A breach of the daily pivot around the 38.2 retracement should set up the attempt at breaching the swing high. I have been warning about the build up in shorts and at this point believe we will be seeing a short squeeze.
The 30 minute chart gives you the areas I am watching noted with the boxes and horizontal lines based off various TFs. The first step for price is to breach the local swing high which is the equilibrium of that green box at $6627. Shorts should begin seeing liquidation around the mid-$6500s and mid-$6600s. I have highlighted the S1, pivot, and R1 levels in red. These are significant areas that price needs to push through to continue higher. The big move will be if price can breach the top of the blue box at $6925. That box denotes the previous supply zone/demand zone/supply zone once again. Currently, price is forming a tight pennant at the end of that $200 green candle suggesting that we should see it targeting the $6700-$6800 area. I wouldn't be surprised, depending on the degree of shorts liquidation up to that point, if we saw price extending its run to $6950. A fast enough move has the potential to see price pushing all the way up to the $7200 area as traders scramble to cover their shorts while others get liquidated. A significant number of stop losses and longs should be triggered on a breach of the top of that blue box. Failure of follow-through at this point, has the potential to see price dropping further. If so, traders should watch the boxes noted below price for support.
As always, I will be discussing this in greater depth during today's live streams at 10 a.m. CST and 9 p.m. CST and looking at various TFs. TV won't allow me to post the social media site where I will be broadcasting from, but it's easy to find so I am sure if you are interested in tuning in you'll have no problem finding me. Thank you for checking out the analysis. Be sure to follow us here and leave a "like" on the way out.
The daily chart shows price finding resistance at the descending dashed line as well as support at the S1. I am watching for a new higher high to be printed (price pushing above $8500 swing high) to confirm the potential LPS as noted on the chart. StochRSI remains strongly oversold and RSI is sitting at 36.5, just below its resistance at 41. A push through this resistance should see price pushing through the dashed line. A breach of the daily pivot around the 38.2 retracement should set up the attempt at breaching the swing high. I have been warning about the build up in shorts and at this point believe we will be seeing a short squeeze.
The 30 minute chart gives you the areas I am watching noted with the boxes and horizontal lines based off various TFs. The first step for price is to breach the local swing high which is the equilibrium of that green box at $6627. Shorts should begin seeing liquidation around the mid-$6500s and mid-$6600s. I have highlighted the S1, pivot, and R1 levels in red. These are significant areas that price needs to push through to continue higher. The big move will be if price can breach the top of the blue box at $6925. That box denotes the previous supply zone/demand zone/supply zone once again. Currently, price is forming a tight pennant at the end of that $200 green candle suggesting that we should see it targeting the $6700-$6800 area. I wouldn't be surprised, depending on the degree of shorts liquidation up to that point, if we saw price extending its run to $6950. A fast enough move has the potential to see price pushing all the way up to the $7200 area as traders scramble to cover their shorts while others get liquidated. A significant number of stop losses and longs should be triggered on a breach of the top of that blue box. Failure of follow-through at this point, has the potential to see price dropping further. If so, traders should watch the boxes noted below price for support.
As always, I will be discussing this in greater depth during today's live streams at 10 a.m. CST and 9 p.m. CST and looking at various TFs. TV won't allow me to post the social media site where I will be broadcasting from, but it's easy to find so I am sure if you are interested in tuning in you'll have no problem finding me. Thank you for checking out the analysis. Be sure to follow us here and leave a "like" on the way out.
